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Two points of clarification...
1. I do see the core of responsibility falling on Flickr as they can regulate how their API works and more strictly regulate requirements of that API use around set image licensing. The API forbids access to private photos. I see no reason why it can't for All Rights Reserved. Granted that is extreme, but it proves my point they can do something.
2. I would argue that Myxer was indeed "selling" Flickr photos. The photos were coming up as results in an e-commerce site. The value of those products were set at $0. They have a mechanism of selling/subscribing and opted to value that work at $0. There is nothing to say that values wouldn't change at a moments notice. On top of that their system to this date still distributes copyrighted material illegally. Case in point in the realm of photography with this photo of Michael Jordon http://www.myxer.com/wallpaper:490967/
As I posed the question to a commenter of my blog post. What is worse someone selling your photo or giving it away for free? It is the same in my eyes as someone is assigning value to your work who does not have the right to do so and then distributing it.
On the first point. while that would be an option, it would also eliminate a lot of legitimate uses of Flickr content. I think the outright blocking of ARR images would be a bit much. A better solution would be to limit ARR images to thumbnail use only. Generally, the law allows for thumbnails to be displayed under fair use, this coming about since the Google Images ruling, so I think that would be a compromise that would allow some use fo ARR images in the API, but not infringe on copyrights.
On the second, I don't disagree that Myxer did something it shouldn't, but saying that it is for sale is somewhat inaccurate. I personally would refer to it as a "commercial use" since the site admitted they were advertising supported. I have no doubt that there was a profit motive behind the use, with or without the shopping cart, but it still isn't actually for sale until money something else changes hands.
Regarding the final question, I agree with you whole-heartedly. The law, however, does make a distinction so I do have to pay attention to such things.
The law, sadly, does not always understand the spirit of the artist.
As both a photographer and a developer who uses Flickr's API, I haven't made up my mind as to the best solution. But it was painful and frustrating to read so many comments (on other blogs noted) from folks who either misunderstood the issue or jumped to conclusions about Flickr's attitude.
I do believe Flickr needs to make the licensing information clearer to users of the API. For example, the API call that finds the most recently updated photos for a user (ie, their photostream) has an optional parameter that enables the license type to be returned for each photo, along with the usual metadata.
The fact that (1) this request for license info is optional, and (2) the license info is an obscure code that needs to be looked up with another (one-time) API call, makes it more likely that a developer will remain ignorant of a given photo's license. If Flickr always returned the license info, and it was in a clearer format, it might encourage those developers to think more carefully about the usage of any given photo fetched via the API.
Excellent point, thank you for sharing that!
How Flickr could make the world a better place for copyright
An excerpt: